Making the Potential Competition Doctrine Great Again

Antitrust enforcement efforts against “big-tech” have been hobbled by the destruction of the “potential competition doctrine.” This post describes how the Supreme Court made the doctrine ineffective after creating the doctrine.  It then describes how the antitrust enforcement agencies handcuffed themselves further in the development of the doctrine through their merger guidelines. As currently formulated, the potential competition doctrine makes merger enforcement by tech companies impotent. The paper uses Facebook’s Instagram acquisition as an example. It then offers a proposal on how to fix the doctrine to render potential competition a meaningful tool in antitrust enforcement.

By Mark Glick & Darren Bush^[1]

I. INTRODUCTION

Google, Amazon, Apple, Facebook (Meta), and Microsoft (“Big Tech”) dominate the American technology sector.^[2] All of these companies exercise considerable market power through various strategic practices. A growing chorus of commentators have argued that Big Tech’s dominance has been advanced and maintained by hundreds of acquisitions of smaller start-up firms, many below the Hart-Scott-Rodino thresholds.^[3] Some of these firms, had they remained independent, might have quickly scaled, or entered into alliances, and challenged the Big Tech firms.^[4] To prevent this from occurring, Big Tech stopped these potential competitors in the cradle by establishing “kill zones” where the potential challengers are ei